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2016 (12) TMI 34 - AT - Service TaxRefund - CENVAT credit - 100% EOU - export of services or not - scientific or technical consultancy service - Appellant avails CENVAT credit on inputs/input services as per CENVAT Credit Rules, 2004 but, being an exporting unit, is unable to utilize the accumulated CENVAT credit. Refund of the accumulated credit is claimed under rule 5 of CENVAT Credit Rules, 2004 - POPOS rules - Held that: - the location of performance of service in respect of goods is not an abstract, absolute expression for fastening tax liability on services that involve goods in some way; for that, rule 3 would have sufficed. A contingency that is not amenable to rule 3 has been foreseen and remedied by rule 4. And in the process, the sovereign jurisdiction to tax is asseted. It is, therefore, not by the specific word or phrase in rule 4(1) of Place of Provision of Services Rules, 2012 that the taxability is to be determined but from the mischief effect intended to be plugged. It is obviously not intended to tax any activity rendered on goods as to alter its form because that would be covered by excise on manufacture or be afforded privileges available to merchandise trade. The provision itself excludes goods imported temporarily for repairs but that does not, ipso facto, exempt goods imported temporarily for repairs from taxability which would, by default, be predicated by the intent in rule 3. Consequently, a recipient in India would be liable to tax on such temporary imports for repairs while service to a recipient located abroad would not be taxable. This is in consonance with the privilege of exemption afforded to export of services. The goods supplied to the respondent, minor though the proportion may be, are subject to alteration in the course of research. It is not asserted anywhere that these goods, in its altered or unaltered form, are sent back to the service recipient; if it were, the provisions of Customs Act, 1962 would be invoked to eliminate tax burden. If the goods cease to exist in the form in which it has been supplied, it cannot be said that services have been provided in respect of goods even if it cannot be denied that services have been rendered on the goods. Consequently, the provisions of rule 4(1) are not attracted and, in terms of rule 6A of Service Tax Rules, 1994, the definition of export of services is applicable thus entitling the appellant to eligibility under rule 5 of CENVAT Credit Rules, 2004. The respondents to be entitled to refund of accumulated CENVAT credit - appeal dismissed - decided in favor of assessee-respondent.
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